Closing Bell - Closing Bell Overtime: Markets React to Oil Risks, OpenAI Expands Into Checkout and Investors Size Up the Consumer 3/5/26

Episode Date: March 5, 2026

Barbara Doran of BD8 Capital Partners and Charlie Bobrinskoy of Ariel Investments join the markets panel to assess positioning, leadership and where investors should lean next. Earnings from Marvell Technology, Gap and Costco add another layer to the market narrative. Ian Bremmer, Founder of Eurasia Group, examines how tensions involving Iran could reshape global energy flows and geopolitical risk. Katie Stockton of Fairlead Strategies maps out key breakouts and breakdowns across the tape while Corey Tarlowe of Jefferies evaluates the state of the consumer and what upcoming retail results may reveal. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

The bell's bringing out to the Training Day at the NYSC Congressional Medal of Honor Society, ringing the bell. And at the NASAC, NASAC, Texas, in front of the Alamo, I think, doing the honors there. Welcome to closing bell overtime. We're live in studio be at the NASAC market site. I'm Melissa Lee, along with Mike Santoli. Sox hauling today as crude prices rise down down about 800 points. The S&P 500 down about 40 points, and the NASAC down about half a percent. The Russell, though, the hardest hit off by about 2%.

Some of this year's leaders were the big laggards, industrials, materials, materials, and Staples, consumer discretionary meantime, eking out some gains. Our markets team is all over today's action and earnings. Pippa Stevens is following the big moves in oil. Rick Santelli watching the bond market and three earnings reports were watching. Gap, Costco and Marvell. The options market pricing in a move of about 10% for Marvell's stock. But let's start on today's market moves with Christina Parts in Evelace.

Christina. You guys talked about it. Markets under pressure again today. But the NASDAQ did hold up a little bit better than its peers dropping up, A propped up, I should say, by big tech and software. Amazon, Microsoft, among the brighter spots, keeping the composite from actually sinking further today. On the software front, you had Oracle, CrowdStrike, Salesforce, all's closing higher, with that rotation, though, coming at the expense of semiconductors.

The spread between software and chips now is at its widest eight-day level on record. Even Broadcom's bullish 2027 outlook for AI, not enough to help or lift the chip space. Elsewhere, energy is just one of the two S&P sectors in the green today, led by APA Corp, Devin Energy, and EOG resources, all-knit gas plays, by the way. Risk appetite remains depressed for obvious reasons, and you can see it in the most crowded trades. The momentum ETF down more than 3% on the week with memory names also lower, those high-flying AI bets among the first, unfortunately, to get dumped when investors pull back. And the sell-off extending into retail today, Dollar General, Costco, Walmart, all closing in the red. American Eagle as well, but that had a lot to do with earnings just yesterday. You can see shares down almost 14%.

Guys? Christina, thanks. Christina Parts Nevelas. Mike, I don't know what you thought of the market. It felt like at any point in time, it could have moved in any direction. There wasn't a lot of conviction in anything. Highly sensitive, both to headlines and both to itself. Basically, when you see these divergent moves under the surface, you have a volatility index at 24.

That implies like a percent and a half move per day. That's what that statistically means. Jeffrey's trading desk said on a scale of 1 to 10, the portfolio pain today among their clients was a 10. Now, that doesn't make a lot of sense. We're down half a percent in the S&P. We've had much worse days, but I think that tells you that the consensus positions are getting punished, and the things that people thought they could leave behind or we're short are rising. To me, it makes it harder to draw a message out of this market on a macro basis.

And I think it's because nobody has a clear sense of where we are in terms of what the ceiling is for this move in oil. And, you know, we traded at this level, closed at this level of the S&P four times before the invasion of Iran, right? So does that mean that we're all just kind of, you know, being too hopeful and thinking this passes and nothing is changing? Or is it say that we're at battle-tested market that's resilient? Could be one of the other. I guess it's just half glass, half full. Yeah. And each day is its own, you know, kind of battle in itself.

Yeah, exactly. Let's get some more on crude. Of course, that was a big driver in today's market session. WTI crew prices breaking above $80 a barrel, the highest level since January 2025. Pippa Stevens has got the details. Pippa. Hey, Melissa. So at the high, WTI topped 81, with traffic in the Strait of Hormuz still at a standstill,

and the clock is ticking as barrels quickly pile up in storage. Saudi Arabia and the UAE have partial bypass options, but Iraq, Kuwait, Qatar, and Bahrain do not. Now, this chart from Kepler gives the storage picture. Saudi Arabia has 67 million barrels of storage, and they have 35. million barrels of space left, meaning they have space for seven days if exports stopped. UAE, Kuwait and Qatar are slightly better positioned, but Iraq has just three days, and they have already started shutting in production as space runs out. Now, this trade is also key for products with 4.3 million barrels of products moving through

the waterway daily last year. Those markets are looking increasingly tight, with Arbob at a two-year high, and European diesel on pace for its best week on record, up some 44 percent. The gasoline crack spread topping $30 today up from 14 at the beginning of the year. Melissa? PIPA, are there measures by the administration that the administration could take outside of releasing from the SPR to relieve some of the pressure of energy prices being so high? Yeah, Melissa, so there are a couple of other things.

They could relieve sanctions on Russian oil, for example. They could also release some of the Venezuelan oil that has been bought and sell those into the open market to U.S. producers. There's also in addition to the SPR, potentially a coordinated SPR release with other IEA parties, although it does seem that appetite for that might not be that large, given Europe's stance when it comes to the U.S. and Iran. Another thing potentially that they could do is a gasoline tax holiday, but clearly with the national average now crossing above 320 per barrel and then diesel prices rising even more, and that, of course, is a tax on the consumer.

This is very much at the forefront, and likely we'll work to see more announcements on that front, especially since the announcement about providing wartime insurance for tankers transiting the strait. That has not come to fruition quite yet, still awaiting clarity on that. And each day that tankers can't transit the strait, the more impact we're going to see on oil and product prices. All right. Pippa, thanks. Pippa Stevens.

Let's get to Rick Centell at the CME with a look at yields. What a jump we saw today, Rick. Yes, and something Pippa said should ring true to every central banker that may be listening or watching. What's going on in energy is a tax on consumers. So this notion that you may have to raise interest rates to combat higher energy prices to me makes very little sense. Let's look at a chart going back two weeks,

and let's put oil, boons, two-year, and our two-year. And you can see it's all about oil. I have sources that don't trade oil that have oil as a hedge against everything. So one thing we've gained from that chart is short maturities around the globe have a much larger response on the interest rate side than the longer maturities due to what the implications may be to central bankers. Now, if we look at two weeks of the dollar index versus crude,

it's the same dynamic. That dollar's following it right on the way up. And finally, if we look at two-year and 10-year year-to-date in the U.S., look at the difference. A two-year is within striking distance of their high-yield close at 361, the tenure is still. lower on the year. Melissa, Mike, back to you. Rick, thanks very much. Well, despite the big intraday moves we are seeing, the Dow and the S&P are flat for the year with the S&P just 3% off, it's all-time high. So should investors adjust their strategy, given the volatility, or look past the noise and focus on the underlying fundamentals? Let's bring in BDA Capital Partner, CEO, Barbara Duran, and Charles Proprinskoy, Vice Chairman of Aerial Investments.

Welcome to you both. Charlie, I'm going to go to you right there because I wonder if you'd want to speak through us to Rick, who's also in Chicago, about whether oil is inflationary and your general sense of concern around whether we may have another inflation problem coming. Yeah. Interest rates are up, not because central bankers want them to be up. They're up because inflation is going to be higher. We have lots of forces all pushing inflation higher, small, each by themselves, but together is significant. So we have massive federal deficits. We have war in the Middle East. We have less immigration, which puts pressure on wages. We have tariffs, which are a form of tax. All of those things are directionally inflationary, and inflation is going to be

stubbornly high. And so when people lend money to the U.S. government, they see that, and they're going to demand a higher rate. That's what's going on with interest rates. That's why there's no flight to safety right now, which normally would send interest rates down. People are demanding higher rates because of higher expectations for inflation. And then just to follow that quickly, Charlie, how does that inform how you would want to be investing in the stock market right now? Because it's not as if the yields in absolute terms are at onerous levels, even oil. We've been here before, not that long ago.

You're absolutely right. $80 is not on an inflation-adjusted basis. We've been much, much higher than this before. So this by itself isn't going to be that inflationary. But what it is going to do is it is going to – there are certain. kinds of companies, which I like to refer to as hard companies, just like hardware and software, these are hard companies with hard assets. Those are the kind of companies that tend to do well in inflationary times or at least not be hurt by it. And then those same companies tend to have

less obsolescence risk from AI. So there's a whole category of companies, energy at the top of the list of a barrel of oil is just as productive, just as important in an AI world as it was before. same thing for the value of your house, your car, farmland, fertilizers, hard assets whose value doesn't go down in inflationary world and doesn't go down with AI. Barb, just taking a look at your top holdings, it looks like you're not scared by any of this. You're willing to go out in technology, belong to things that have been punished for the fear that AI could displace or dent their businesses. Right. Well, because there's two reasons. One is the valuation has gotten so extreme. I mean, you saw the software's had a bounce back.

It was down 30%, which is a record low, you know, in terms of it, and also where it is, trades in relation to consumer staples. It's recovered a little bit. It's still down 20%. But I think valuation here gets very interesting. But I think it also rewards stock picking because there will be some companies that are hurt. And we're not going to know for a while. Maybe it'll take a year until we see how it impacts their business model.

But things like CrowdStrike or Palo Alto, which have been damaged here, When you look at really what their business is, are people really going to use their own kind of AI to do their own cybersecurity when it's so important? No. And so I think there are definite opportunities within that. And so when you look at even Shopify, that's an end to end. And when you begin to really understand their business models, you know, there are companies that will probably be using and they are using AI to help their own businesses. And Shopify is a case and point. Just to understand your holdings list, for instance, IGV is at number four right now, according to our latest notes. were you in it for a long time or are these recent acquisitions?

That's very much an opportunistic thing because particularly when we're not going to know for a while which software companies are going to do well and which are not. The IGV is a very good way to play it because it's a broad-based thing. And so when it's so oversold, it's a pretty good bet that you're going to have a big bounce up. The banks were very weak today. The investment banks in particular, Goldman Sachs caught up in some of that. Is that something you'd have to pay more attention to in the sense? of cracks in credit or just in general risk appetites?

Well, it's an interesting question because I think in the private credit concerns, and it's really people are concerned because there's no transparency. You don't know what a lot of these companies hold, and there's a lot of excess capital. Now, a firm like Goldman Sachs or JP Morgan, they will have some exposure, but it's not going to be a lot, and I don't think it's going to affect their broader business. I think the more relevant question for Goldman Sachs is, are we with this prolonged uncertainty and volatility in the market? Isn't going to hurt the IPO market, secondary is all that, because it's a lot.

beginning of the year. And after last year, M&A and that activity looked very strong and certainly it's been reflected in their recent earnings. I think that's more to do with the sell-off. And also because I just think they're relatively immune, you know, from AI disruption and some of the other concerns about private credit. Charlie, do you see opportunity in some of the areas that Barbara Hyde identified? I mean, areas like software, for instance, I mean, you know, with these large drawdowns that we've seen recently that have only reversed, you know, in the past week or so, Some of those stocks have become even more value plays and maybe more attractive for the likes of you and Barbara.

One of the most important lessons that Warren Buffett gave us was the concept of too hard. To value a stock at 30 times earnings or even 25 times earnings, you've got to be very confident of your ability to forecast future cash flows. And to me, a lot of these technology companies just don't pass that test. The one name that I've always held out as a little bit of an exception is Oracle. The companies in this world want to do AI on their own data, and that data sits on Oracle software, and Oracle is only trading it 21 times forward earnings. But a lot of these technology names, it's just very hard to calculate winners from losers and very hard to calculate fair value.

All right, fair enough. We can't leave it there. Thank you, Barbara and Charlie. Marvel technology earnings there out. Christina Parts Nelves has the numbers. Christina. This is a custom chip company, and they beat on the top and bottom line, a one penny beat for the adjusted EPS at 80 cents per share. Revenue, $2.22 billion, but it's really the guidance that

is causing shares to just jump about 7%. The company expects EPS for the Q1 to be around 79 at the midpoint, higher than the street, about 5 cents. Q1 revenues at $2.4 billion. That's at the midpoint, higher than what the street was anticipating. Gross margins also coming in higher. They did put a few quotes in the release saying that they expect year-over-year revenue growth to accelerate each quarter in fiscal 2027 driven by continued strength in their data center business, with bookings continuing to grow at a record pace. I think that strong statement really helping. And the last but not least, the Q1 guide does also include expected results from their recent acquisitions of Celestial AI and Xcon since they closed at the end of

2026 guys. Shears up now 8% on this bullish guide. Christina, thanks. Prasina Parts and Nevelas. Coming up, the energy sector, ETA. XOP hitting the highest level since June 22 today with names like Philip 66 and Valero at multi-year highs. Ahead will break down the best way to play the surge in energy prices. And emerging markets falling off a cliff since the attack in Iran will break down the charts to see if there's more pain ahead for those markets. You're watching closing bell over time, live from the NASAC market site. Gap earnings are out, sending the shares down by about 10% right now. Gabrielle von Ruge has the numbers. Gabby. Yeah, thanks, Melissa. So Gap is reporting

mixed Q4 results with EPS, missing expectations on revenue that's just in line with consensus. Now, worse than expected results at Gap's biggest brand, L. Navy, contributed to the miss and weather is also partially to blame here. Finance Chief Katrina O'Connell told me this isn't an excuse like we've obviously heard before, but we did have historic winter storms, which did lead to around 800 store closures towards the end of the quarter, and that, of course, weighed on performance. But what's going to be key to watch tonight and moving forward is the Impact tariffs are going to have on GAP's guidance and margin. GAP was heavily impacted by the recently struck down AEPA tariffs. But those duties were higher than the new 15% rate that's coming into effect.

O'Connell said that if that 15% rate were to stay in place for the rest of the year, it should lead to a more favorable outcome than the outlook it provided today. All right. Gabby, thanks. Gabrielle Fon Rouge. Do not miss Jim Kramer's exclusive interview with Gap's CEO coming up 6 p.m. Eastern Time on Mad Money. Well, airline stocks continue their decline today as the Middle East conflict grounds flights and drives energy prices higher. Jet fuel prices have risen significantly in the past week, with prices in the U.S. and Asia hitting a two-year high. In Europe, they spiked to the highest level since 2022, Rothschild and Company Redburn, writing today that American Airlines has the greatest sensitivity to fuel prices with every 10-cent move per gallon, equating to almost 25% in its earnings per share. The airline's ETF jets posting its fifth straight down day since April 2025. Speaking of higher energy prices, our next guest says,

if the war in Iran lasts a few more weeks, which is his base case, prices for crude could stay at these levels and possibly move even higher. Joining us now is Ian Bremer. He is the president of Eurasia group. Ian, great to see you. Walk us through that thinking. How do oil prices stay higher or even move higher than where we are now, even if there is an off-ramp?

Well, the off-ramp is not in front of us. The administration started with telling its allies a few days, then it became four weeks, now it becomes potentially eight weeks. President Trump made very clear today that he wants to have direct influence or veto power over who the next Iranian leader is going to be. And his ability to affect regime change either requires boots on the ground, which he's reluctant to do, or it requires some level of coordinated opposition

that's armed and capable, willing, to take the regime out. We don't have that either. So, I mean, unless the off-ramp is going to be Trumps, and he's capable of doing that, but he's not showing any signs of that so far, not at all, then I think we have to expect that this war is going to last longer

than the market's initially anticipated. I mean, there's got to be a scenario off of a scenario because even if there is an off-ramp, the number of outcomes are pretty wide. And so what's your base, if the base case is an off ramp in a few weeks, what is the base case for what that off ramp looks like? It's not fragmentation. It's not that the Kurds come in and they're armed and they're able to like take one piece

and their secessionists to take another piece and there's a rump regime. I think that's very unlikely. So not the worst worst case of civil war. Everything breaks down massive refugees and the rest. Rather, I think the most likely cases the Americans continue to engage in lots and lots of strikes with the Israelis, probably some level of troops on the ground someplace, because Trump has been very, very careful not to exclude it. And he understands how unpopular it is, so it seems increasingly likely.

But you're going to end up after all of this devastation with a much weaker regime that looks a lot like what you had before, not very pragmatic, not the Venezuelan. scenario where they're willing to work with the United States. Now, the problem with that is that the Iranians are still going to have lots of oil revenue because the alternative to that is the Americans cutting it off and prices staying much higher for much longer, which nobody wants, least of all, President Trump. If you're not willing to do that, you don't change the regime, then you have an Islamic Republic that continues to make a lot of money and spends that money in ways that are antithetical to the national security concerns of the U.S. and Israel.

And what are some of the secondary impacts in terms of relations between the U.S. and other countries, such as China? You know, there's maybe one thought out there that with the president planning to have a meeting with President Xi and China in April, that that might end up putting some kind of a bound on operations or maybe, you know, China would sort of draw some line and say the meeting's off if, in fact, something gets breached. So how does that play in if at all? Yeah. That's clearly not going to happen. I think both of these leaders are very, very committed to making this meeting big and stabilizing

and symbolically really important and a huge welcome for President Trump and probably a bunch of CEOs going with them. No, what the Chinese officials that I've spoken with are a little irritated about is that this distraction of a war in Iran means that the United States has not been putting much

on the table in terms of suggested outcomes for the April meeting. They want the Chinese, you know, sort of to go first. And, you know, China doesn't like uncertainty around these things, least of all around their respected, you know, sort of head of the Communist Party. So that is causing, I would say, a little bit of adjeda in Beijing right now. But I really don't see that problem. I think the bigger problems are with American allies. They're in the Gulf with countries that are exposed to these direct strikes and they're kind of angry.

It's not like they were being consulted. The Europeans, I mean, the United States is going after the UK and Spain, even though there was literally not a moment of heads up provided to the closest allies in Europe about the fact that the U.S. was about to make these strikes. But then as soon as they do, they're like, no, no, no, we want you to help us. We want you to participate. and by the way, we're going to go back to 15% tariffs despite the deal that you've struck. So, I mean, you're definitely hearing a lot more irritation from many of the allies. You know, there was a headline today, a story about how the Gulf states would not necessarily want, at this point, the U.S. to just sort of pull away because it would be sort of maximum disarray and they would have to absorb some of the impact.

So, I mean, what can we think about that? Well, I think that's right. but the Gulf states would have been much, much happier with something much more contained to begin with. So, I mean, you know, they understand that this is a war without much of a plan. It's a war of choice by President Trump. There's absolutely concern that the Iranians were continuing to develop ballistic missiles, large-scale production. They were trying to reconstitute their nuclear program. And I think the Gulf states would have been completely on board, okay, not Oman, that was doing the actual mediating in the negotiations.

But the Saudis, the Emirates, if the U.S. had said, we want to go back and do the 12-day war again, but more expansive to hit more military targets, hit the ballistic missiles, no problem. But the decision to go in guns blazing and assassinate the Supreme Leader, assassinate the top military leaders, think maybe you've got someone to work with, but then, oh, well, most of those people have been killed. Like, that doesn't sound good to the Gulf. Why wasn't there a plan for a disrupted straits of Wormuz? Anyone that was thinking about these strikes understood that that was a very serious likelihood

if you're going to hit the Iranians that hard. But that's what the Gulf states are angry about. Right. And we've got to leave it there. Thank you so much for joining us. Ann Brommer. Costco earnings are out right now. Gabrielle von Rouge has those numbers.

Gabby? Yeah. So Costco's reporting earnings per share of $4.58. That's a beat on $4.5. 56 cents, which was consensus. That's going to be on revenue of 69.6 billion. Also a beat, they were expecting 69.29 billion. So Costco does report monthly figures for us. So a lot of this isn't a huge surprise, but what's different today is that we got total revenue. That includes membership fees. And what we saw today is that membership fees were up about 14% year over

year at 1.36 billion. And one of the things that we're going to be looking out for tonight on the call is membership renewal rates. Over the last couple of the last couple of years, we're up to be looking at of quarters that has been slipping. They have been acquiring more online customers, and those customers renew at a slightly lower rate. And, you know, of course, this makes up a very small portion of Costco's overall revenue, but this is how they keep prices low. So it's going to be something we're going to watch tonight. All right, Gabby, thanks, Gabrielle Fon Rouge. Well, there is a lot of red in the markets today, but booking holdings, DoorDash, and Expedia bucked the trend because of something Open AI is reportedly doing. We got that story next. And check out chairs of Trade Desk. One of the

real bright spots today following a report, it will help Open AI. ads on Chat GPD. AI fears of really weighed on this stock, which is still down more than 40% over the last six months, even with today's game. Stay tuned. Welcome back to overtime. Take a look at some of the e-commerce names today, booking, DoorDash, and Expedia, all closing higher on reports that OpenAI will scale back its plan to introduce shopping directly inside ChatGPT. The company will now focus on having checkouts take place inside specific apps that plug into chat GPT. Wedwish saying this morning that the move could help limit potential margin pressure for some of these companies, as OpenAI will now likely take a smaller cut

from these transactions. So why is OpenAI reportedly scaling back this initiative? And what does this tell us about the difficulties of merging different AI with different industries? Kate Rooney explains, Kate. Amy L. So this is a major change for Open AI. The company had made this major push to let users essentially make purchases directly

from within-chat GPT, from product listings, and it was really seen at the time as a threat to some of the names. You mentioned that are rallying today. You've got Etsy, Shopify, for example, and those are getting a boost here. On the back of this, the push at the time was really meant to happen within chat GPT. Search results, the pivot here going forward. Open Eye is going to look to leave checkout within the apps that actually plug into chat GBT, a spokesperson confirming this telling us we are evolving how we approach commerce in chat GPT

to better meet merchants and users where they are and says instant checkout is moving to apps where purchases can happen more seamlessly. OpenAI also says they landed here after learning from some of the early launches and user feedback. The move makes Open AI, on one hand, a lot less threatening as a partner as it really tries to beef up its enterprise business. Companies still want to be the main interface and connect directly with their customers. That is really what they care about. Open AI has been trying to win over major Fortune 500 clients and diversify away from just that consumer business. Also speaks to some of the challenges of actually integrating AI into shopping.

Plus, there could be an Amazon factor here. invested up to $50 billion in its latest round. Open AI's latest round as part of that. Open AI is going to be building some custom models for Amazon's own shopping capabilities and chatbots. It had also put some restrictions on sort of the external chatbot shopping side of things. Amazon did. So they had been sort of wary of this in the first place. You have to wonder if that at all played into this decision. And then, Kate, I guess, I would imagine within Open AI, they really need to start setting some priorities as opposed to try to do everything in every direction.

Was this something that was considered to be potentially imminent as a broad rollout? It was, Mike, and they had made this major push. When we talk about sort of the impact on margins for e-commerce, there got so much buzz around this in the fall and when this was actually launched, but it does come as they're looking to diversify into advertising. I would say as they're strategizing, advertising when you look at shopping is probably a better opportunity for OpenAI than taking a slice of e-commerce.

And I do think the enterprise side of this as they try to partner with companies, the big question when we talk about AI threats, whether it's anthropic or these agents or coding, I think the big thing, software companies, e-commerce companies, they just want to be sure that they can use this as a layer of the technology

and they can be the ones connecting with the customers. They want to make sure, okay, you're logging on to Expedia to book. We don't really, you know, we can use that technology. We can use AI on the backside, but we want to make sure that you are still connecting with us directly. we are the interface. That's something we hear from companies all the time, that as long as that's the case, they're a lot less threatened. And I think open eye is wising up to that, that they don't want to disrupt everyone at this point. They want to be a layer on top of it for now.

We'll see how that evolves. All right, Kate, thanks so much. Thanks. Well, time for a CBC News update with McKenzie Seagallos. McKenzie. The FBI today confirmed that its networks were targeted by suspicious activities without providing any details. Sources tells CBS news that the networks targeted in the cyber incident are known as the digital collection system, a suite of software used by the Bureau to conduct surveillance activities. Republican leadership in the House today called on Congressman Tony Gonzalez to end his re-election campaign after the Texas rep admitted to an affair with a staffer who later killed herself. Gonzalez confirmed the affair yesterday after the House Ethics Committee launched an investigation. He currently faces a runoff after failing to get 50% of the vote.

And former U.S. Attorney Lindsey Halligan, who made unsuccessful attempts to indict some of President Trump's enemies and was subsequently removed from her job for being improperly appointed, is now under investigation by the Florida Bar Association. Nonprofit organization campaign for accountability had filed complaints against Halligan in both Florida and Virginia. The investigation could lead to disbarment. Halligan has yet to comment. Back to you. Mack, thanks, Mackenzie Zagalos. Up next, we will break down the turn. starts in tech to find out whether the underperforming sector's next move is a breakout or a breakdown. Plus, fast money's Guy Adami on how he's trading oil-related stocks as crude rallies pass $80 a barrel. Closing Bell overtime. It's back in two.

Welcome back to Closing Bell overtime, live from the NASDAQ market side. Stocks closing the day lower as oil topped $80 for the first time since January 2025. The Dow was down nearly 1,200 points at the lows. The SB 500 closing flat, the NASAC off less than a half percent. Software catching another bid today. Service Now, DocuSign, Adobe and Salesforce, seeing a nice bump higher. Some moves after hours as well. Marvell Technologies jumping in the back of results, EPS revenue, and data center revenue coming in ahead of estimates. The company's EPS and Revenue Outlook, also better than expected. And Sam Sera jumping, the cloud company reporting a beat on EPS and revenue, first quarter and full year revenue estimates, also above consensus.

Well, emerging markets down 8% this week after the attack on Iran. Tactical charts suggest investors could continue to expect some more bumps ahead. Joining us now is Fairleet Strategies, founder and CNBC contributor Katie Stockton. So Katie, it's one of those very extended popular trades in the first part of this year that's really had a pretty significant test to the downside. What are you looking at with regard to emerging markets in particular to let us know whether this is an overall trend change or maybe eventually a buying opportunity? Yeah, I would just look at it as a pullback, but one that's likely to

continued. It obviously started off very sharply with the news. We saw a breakaway gap down in EEM, the ETF representing emerging markets. And that gap down does suggest that we'll see near-term downside follow-through. In addition to that, we have downturns on our weekly bar charts, and those are more intermediate term in nature, something of the nature of maybe two to three months in their implications, the sell signals that we have on the weekly chart now. We can still view this very much within the context of the long-term uptrend that has been established by EEM. You can even expand that more broadly to international, develop global in general, because they have run so far so fast. So at this point, it's just a retracement in absolute terms.

And I assume something similar would apply maybe in an amplified version of that if you just looked at the Korea, ETF, or Taiwan, which of course became, you know, proxies for memory chips and semis in general? That's right. They have that double whammy of having emerging markets and technology, both of which have been under pressure, hit them pretty hard this week looking at EWT and EWY as proxies for those countries. And there too, those pullbacks, which are already dramatic, should continue in the near term referencing our short-term momentum gauges. But we will be ultimately looking for a sort of buy-the-dip or by-the-weakness opportunity. We just think that.

that might be several weeks out based on the indications that we have. And then in terms of things that look like they've been improving, I know you've had your eye on real estate plays, various types of reeds. What are you spying there? Well, as you know, it's a tough market to find actionable, long ideas when you have that weakened momentum from a top-down perspective. But when we find something that stands out as looking a bit different from a technical perspective, that's where we take interest.

And the Tower Reeds stand out in that way because they had been trending lower. This would include Crown Castle, American Tower, SBA Communications. All three had seen downtrends and then successful tests of long-term support levels, even saw bullish shakeouts, which are essentially false breakdowns in January, that are now giving way to improved intermediate term momentum. So I'm intrigued by the setup. I do think just in general to be reduced in equity exposure,

now is probably okay. But these tower reeds stand out as an opportunity to leverage something that just looks different than the broader market. And then really quick, the flip side of all this, this ferocious bounce in software. If you looked at the IGV, is that something you'd sort of let rally further before selling it or not? Yeah, I've been on board with the IGV sort of pair trade against semis in general looking at SMH. I do think that that pair will continue to favor long software versus short semiconductor stock positions. In absolute terms, the bounce, I think, has a little bit of room. We have our demarc indicators that we're tracking supported other few days of upside for IGV. And some of its constituents still look pretty good in sort of a short-term time frame.

Microstrategy is one that stands out as something that's been positively correlated to not just software, but also Bitcoin. And that has some buy signals that have even more. duration, but it would be pretty high risk at this point with the top-down influences out there. So we prefer remaining reduced in exposure until the S&P 500 tells us otherwise. Got it. Katie, really appreciate it. Katie Stockton. Of course. Let's get to energy now. Oil crossing $80 for the first time since January 2025, posting its best day since 2020. So how can you play the sector if the move higher continues? Joining us now.

Guy Adami, Risk Reversal Media co-founder and Fast Money Trader. Good thing I'm ambidextrous, Melissa, because last time I was over on Mike's... You like to mix it up. We're mixing it up. I'm not. I'm not. I wake up confused, Mel. So let's talk about the energy market.

And you've liked energy stocks prior to this bump higher in oil, but which one still do you think... Yeah, and Tim Seymour has as well. And we've been taught since probably late summer, early fall of last year, for a number of different reasons. Valuations were compelling. These were companies that were operating better without question. And the balance sheets were probably as good as they've ever been. in the industry. Now all of a sudden, everybody's become an expert in the oil industry overnight, which I totally get and I understand why. Valero, pull up a VLO chart from our crack staff in EC.

I mean, this has been lower left, upper right, and they win. Input costs going higher, but you know what, the products they're putting out, the margins are still there. So I think Valero wins. Marathon Petroleum is another name they'll be like. The problem with Marathon Petroleum, look at the move today. Mike probably has it up. Open, basically, in an all-time high, close around the lows of the day, and we got to levels that we've done. last saw in 2024. And obviously, everybody's going to know about the integrated names, but Exxon all-time high. Chevron finally got into the party.

You may remember this. It was during the Biden administration. It was a Thursday, I think. Chevron reported, now it's a $75 billion stock buyback, and the stock never had another uptick. We finally got back to those prior levels. So, yeah, the integrators are interesting, but I think it's a little late right now. It doesn't mean it's over.

I think it's just late. I just found it interesting that like the oil service names, not able to rally today on crude. So the market is treating this move in the near term with a little bit of skepticism. Picking winners and losers. But OIH, you just mentioned, Slumbert, Haliburton, Baker Hughes to a certain extent. We just made eight-year highs, I think, over the last couple days. And the move has been pretty much straight up. So around the edges, it sort of makes sense what's going on here.

So I don't think you want to now pick your spots. And I do think the energy trade is alive and well. but I think there's when you see price action like you saw in Marathon and to your point, some of the OIH names has got to give you a little bit of pause. And if there's some rugpole in the underlying commodity, regardless of whether or not it makes sense,

you know what's going to happen in these stocks. Guy, see you later. That's it? Yeah. This was fun. No, I enjoyed this. By having the next year, she needs he can speak out of both sides of his mouth. And I wear the earpiece in both ears.

That's talented. Very. Breaking news here on the War Powers vote in the House. Emily Wilkins is the details. Emily. Melissa, the House has failed to pass the War Powers vote that would have limited Trump's power and had him come to Congress for any additional strikes in Iran. Didn't expect it to have the votes. It didn't. Also, it looks like it's going to fail is this additional funding for the Department of Homeland Security, which, of course, is now in its third week of not being funded. Guys?

Emily Wilkins, up next, we'll discuss what Costco in Gap's earnings say about the state of the consumer and how surging energy prices could impact retail sales. Welcome back. Gap shares under pressure after missing Wall Street's earnings estimates. Costco basically flat on a top and a bottom line beat. Retail more broadly getting hammered today. Stocks like Victoria's Secret, American Eagle and Abercrombie, all down 10% or more. But there are some names that have held up better in recent weeks. Most are names in the low-end consumer category, raw stores, five below, T.JX. So what does it say about the state of the economy and how do rising energy prices or the potential of rising energy prices impact the sector? Joining us here on set, Corey Tarlow. He's Jeffrey's equity analyst covering discount in specialty retailers' buy rating on both Gap and Costco.

For Gap specifically, why is the stock down 10% after hours? I think it's a little bit of the focus on the guidance. Overall, the quarter was relatively in line. Some puts intakes on the top line. Old Navy did come in at a plus three. Our expectation was for a plus four, albeit is still very strong. And there is just a little concern around the impact of tariffs and incentive compensation. coming back into the base and impacting the earnings and flow through a little bit for this year. We did hear a little bit of talk of weather. Do we have to brace for that? January was pretty rough.

Weather can impact. I mean, not just forget, but in general as we get these further reports, yeah. Certainly. Weather can impact some retailers. BJ's reported today, and weather was actually a positive for the quarter. But for some, it's a negative. And you saw that a little bit in the results, of course. that could have hurt old Navy's results, that could have hurt some of the other retailers that are more specialty-oriented.

But hopefully that gets made up for over the next several months. Maybe there's some pent-up buying. You have some tax refunds. So there are some tailwinds at the consumers back here. And based on what we've seen so far, what is sort of the general message that we've heard thus far about the consumer? I mean, ANF actually addressed the conflict in Iran, but it sounded like it was more of a direct exposure because they had stores in the region, as opposed to sentiment filtering back to the U.S. consumer? Yeah, I think it's really just the function of the consumer being consistent.

We've seen unemployment hold relatively steady, balance sheets relatively healthy. We heard from Walmart that there is a little bit of weakness at the low end. But other than that, the consumer's been remarkably consistent, but is trading down a little bit and trading into value-ordinated retailers like you talked about, Walmart, T.J. Max, Costco was just reported. And then they're transitioning into categories like private label versus brands because, frankly, inflation in some of those brands has gotten quite out of hand. Corey, thank you for stopping by. I appreciate it. Thank you so much. All right. More closing bell right after this. Breaking news out of Washington. Amon Javvers got the

details. Amon. Melissa, take a live look at the White House right now. President Trump is holding an event alongside the soccer team, Inter Miami. There you see. Leonel Messi, the world famous soccer player, standing next to the president, along with the rest of the team. I wanted to highlight some comments that the president just made, though, because he's standing there, the man to the right of the president with his hands folded before him. That's Jorge Moss. He's a billionaire Cuban-American owner of the Inter-Miamy soccer team. And that fact that he's Cuban-American got the president sort of talking about Cuba here in remarks that I think are significant. The president said he's contemplating some sort of military action. Didn't say specifically what he's contemplating, but he said he's contemplating taking action in Cuba,

either militarily or politically, to change the leadership there. And he said that Cuban Americans will want to go back to Cuba at some point. The president said that might happen within weeks, but that he wants to finish with Iran first. Let me play the tape so you can hear exactly what he said. Take a listen. What's happening with Cuba is amazing. and we think that we want to finish this one first, but that will be just a question of time before you

and a lot of unbelievable people are going to be going back to Cuba. So the president said that could happen within weeks. He didn't specify if this is a military or political solution that he has in mind, Melissa, but he did say that current leadership in Cuba is anxious to make a deal. And he pointed out Marco Rubio,

the Secretary of State in the audience, and said, Rubio's anxious to do Cuba, too, but we've got to finish with Iran. You don't want to do too many countries all at the same time because bad things could happen. Was he asked specifically about this, or did it just come up? He brought it up. He brought it up. And I think it was in the context of standing next to Jorge Moss, who was a billionaire Cuban-American. And he and Messi and Moss had been standing in an ante room before the ceremony together.

So clearly there was some conversation that they had, you know, off stage, that the the president may have been referring to or was on the president's mind. And he brought it up independently. Again, he didn't say military action. He didn't say political action. He just said within weeks and you and the other Cuban Americans will want to go back and that'll be a great day when that happens. So not exactly clear what the president is thinking in terms of Cuba,

but clearly it's very much front of mind. Yeah, and I guess the context too, of course, is that there has been this pressure campaign right, since Venezuela and trying to isolate the, the, country and the regime and everything. So, yeah. Yeah, absolutely. Since Venezuela, the U.S. has been, you know, blockading, effectively blockading Cuba, blocking oil to the country and strangling their economy. That is putting enormous pressure on Cuban leadership, who may be thinking through scenarios

of their own, especially in the wake of last week's strikes on Iran in terms of what the end game is with President Trump. Amen, thank you. Amon, thank you. Amon Javvers. Obviously, we'll see how the market's taking this little bit of news, but then also a big day Job support. Yep.

And retail sales to a lesser degree. But, yeah, a big day tomorrow. Plenty. See, if we get to focus on that or just crude oil. That does it for overtime. Fast money begins right after this quick break.